Trail Order
The moving one

A trail order is a conditional order to buy or sell a security where the trail stop price level adjusts automatically based on market movement. It is designed to follow favorable price changes at a fixed distance while aiming to limit losses if the market reverses. Learn more about this order type.

What is a Trail Order?

Advantages and disadvantages

Submitting a Trail Order via LYNX

Tips & FAQ

What is a Trail Order?

A trail order is a type of stop order where the trail stop price automatically adjusts in response to market movements. The adjustment is based on a fixed value or percentage offset from the current market price. For a sell order, the trail stop price moves upward as the market price increases. For a buy order, it moves downward as the price decreases. If the market price reverses and reaches the trail stop level, the order is triggered and submitted as a market order.

This dynamic stop mechanism allows the order to follow favorable price movements while still maintaining a predefined distance from the market. Once triggered, the execution price is determined by available liquidity and may differ from the trail stop price level.

Please note: A trail order dynamically adjusts the trail stop price as the market moves, allowing it to follow favorable price trends. Once triggered, it becomes a market order, which may result in execution at a price different from the level, this difference is called slippage, occurring when the actual fill price deviates from the expected price due to market volatility or low liquidity. This order type offers flexibility but does not provide precise price control and may involve slippage, particularly in volatile or illiquid markets.

Key Features

Dynamic Adjustment:

A trail order uses a trailing stop price that automatically adjusts based on market movement. The trailing amount can be set as either a fixed value or a percentage. As the market price moves in a favorable direction, the trail price follows at the defined distance. If the market reverses, the trail stop price remains fixed.

Market Execution:

Once the trailing price is reached, the order is triggered and submitted as a market order. This means the execution will occur at the next available price in the market. The final execution price may differ from the trail stop level, depending on market liquidity and volatility at the time of triggering.

How does a Trail Order work?

When placing a Trail order you set up a stop price, which is a price level which stays static and a trail price, which trails market price by a specific percentage or amount. If the stop price is not specified or cannot be specified (LYNX+), it will automatically be set to the last traded price minus the trail amount. After a trail order is placed, the stop price remains static and helps to protect against further losses in case a price moves in an undesired way after opening the trade. Trail stop price automatically follows market price movements at a fixed distance, defined either as an amount or percentage. The trail stop price moves only in the direction of a favorable market trend and remains unchanged if the market reverses.

Buy Order

For a buy trail order, the trail stop price adjusts downward as the market price falls. If the market then rises and reaches the trailing price, the order is triggered and submitted as a market order. Execution takes place at the next available price.

Sell Order

For a sell trail order, the trail stop price adjusts upward as the market price rises. If the price then falls and reaches the trail stop level, the order is triggered and submitted as a market order. Execution occurs at the next available price.

Once triggered, the order is executed as a market order. This provides flexibility in following price trends but also introduces the possibility of slippage, especially in volatile or illiquid markets.

Example:

You have 300 shares of XYZ, currently trading at €20 per share.

You submit a sell trail order with a trailing amount of €1 without a stop price specified. Initial trail stop price therefore will be at €19. As the market price rises to €22, the trailing price adjusts upward to €21. If the price then declines to €21, the trail stop price is reached and the order is triggered. It is submitted as a market order and executed at the next available price. The final execution price may differ from €21, depending on market liquidity and volatility at the time of execution.

Advantages and disadvantages

Advantages

Disadvantages

Dynamic Price Adjustment:
A trail order automatically adjusts the trail stop price as the market moves in a favorable direction. This mechanism allows the order to follow price trends within a predefined distance.

Lack of Price Control:
When the trailing stop price is reached, the order is submitted as a market order. The execution price may differ from the trailing stop price level, especially during periods of high volatility or low liquidity.

Ease of Use:
Trail orders are triggered automatically once the trailing stop price level is reached, based on the parameters set in advance. This reduces the need for manual monitoring during market movements.

Potential for Slippage:
Trail orders are subject to slippage, meaning the executed price may be worse than the trail stop level due to rapid market movements.

Loss Limitation:
By using a trailing mechanism, the trail stop price is updated systematically, which may support a structured response to changing market conditions.

Short-term Fluctuation Risk:
Trail orders can be triggered by temporary price fluctuations, including short-lived spikes or reversals, which may result in unintended execution.

Submitting a Trail Order via LYNX

LYNX+
Trader Workstation
Trading App

In LYNX+, specific securities can be located using the search bar in the top right corner. You can search by name, ISIN code, or ticker symbol.

Once the product is selected, the platform will display a product overview. From this screen, you can click Buy or Sell to open the order ticket. Specify the quantity and select the Time in Force for the order.

Choose either TRAIL or TRAIL % from the Order Type dropdown menu. TRAIL adjusts the stop price by a fixed value, while TRAIL % adjusts it by a defined percentage relative to the market price.

After entering the order parameters, the Summary section displays an overview of the configured order.

To continue, click Send Order to submit or Cancel to discard the order.

After logging into TWS, open the order ticket by selecting Order in the top left corner. If a specific security is already selected, the platform will automatically generate an order ticket for that instrument. You can change the underlying product by entering the name, ticker symbol, or ISIN in the Financial Instrument column at the top of the ticket.

Select the action (Buy or Sell), define the order quantity, choose the destination, and set the Time in Force.

From the Order Type dropdown menu, select TRAIL to enable trailing stop functionality.

Then specify trailing amount and initial stop price (if desired). Set the Trailing Amount as either an absolute value (amt) or a percentage.

To review the order, click Preview in the bottom left of the ticket window. This opens a summary of the configured order. To proceed, click Transmit to submit the order, or Close to exit the preview without submitting.

To search for a product, tap the Search icon in the top right corner. Enter the name, ISIN, or ticker symbol, then tap the relevant result to open the product page.

Tap Buy or Sell to open the order ticket.

Enter the order quantity and define the validity period under Time in Force. Select TRAIL from the list of available order types.

Then specify trailing amount and initial stop price (if desired). Set the Trailing Amount as either an absolute value (amt) or a percentage.

Before submitting, review the order details by tapping the Preview or Calculator icon in the bottom right corner. To submit the order, swipe right across the Slide to Submit Buy/Sell button.

Tips before submitting a Trail Order

Placing a trail order involves specific risks and operational characteristics. To help manage execution quality and avoid unintended triggers, the following factors should be taken into account.

Liquidity

Trail orders tend to function more effectively in instruments with high liquidity.

In liquid markets, bid-ask spreads are generally tighter, and the likelihood of partial fills or unexpected price impacts is lower.

In contrast, illiquid markets may lead to delayed execution or higher slippage once the trail stop is triggered.

Timing

For greater transparency and order efficiency, trail orders should preferably be placed during regular trading hours.

Orders submitted during pre-market, post-market, or around scheduled events (e.g. earnings releases or macroeconomic announcements) may be more susceptible to sudden price movements or widened spreads, which can lead to unintended order activation.

Monitoring

The bid-ask spread reflects the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept. In volatile markets or in assets with wider spreads, a trail order may be triggered and executed at a significantly different price than intended. Monitoring spread conditions before order entry may help reduce this risk.

The chosen trailing amount (fixed or percentage-based) should reflect the price volatility of the underlying asset. If the trailing distance is set too close to the market price, the order may be triggered prematurely due to minor fluctuations. A larger trailing distance can reduce the chance of unintended execution, but may delay the trigger in case of a reversal.

FAQ

Will my trail order be executed if the market is closed?

No, standard trail orders are typically submitted as market orders once the trail stop price is triggered and are not eligible for execution outside regular trading hours, unless explicitly supported by the exchange and configured accordingly in the trading platform.

For stocks, Interactive Brokers only supports Limit, Trail Limit, and Stop Limit orders during pre-market and after-market sessions, provided these are configured to be active during those periods in the order ticket. Trail orders that convert to market orders generally function only during regular trading hours.

Execution availability for derivatives may differ depending on the product and venue. For further details, refer to Outside Regular Trading Hours.

What is the difference between a stop order and a trail order?

A stop order and a trail order are both conditional order types that become active once a specified price is reached. In both cases, the order is triggered and submitted as a market order, which is then executed at the next available price. The key difference lies in how the stop/trailing stop price is set and adjusted.

With a stop order, the stop price is fixed when the order is placed. Once the market reaches or crosses this price, the order is triggered without further adjustment.

With a trail order, the trail stop price is not fixed. Instead, it adjusts automatically as the market moves in a favorable direction, based on a specified amount or percentage. If the market reverses and reaches the trailing stop price, the order is triggered and submitted as a market order.

If there is specified initial stop price in the order ticket, this stop price works as a standard stop order and remains active, until trail stop price moves.

Once triggered, neither order type can be modified or cancelled if it has already reached the exchange.

When can I consider using a trail order?

A trail order may be used in situations where a dynamic adjustment of the trail stop price is preferred over a fixed threshold. This order type allows the trail stop level to follow favorable market movements while maintaining a predefined distance from the current price.

Because it converts into a market order upon activation, a trail order does not offer precise control over the execution price. It may be considered in environments where price trends are actively monitored, but where exact execution levels are less critical than participation in the broader price movement.

What should I consider before placing a trail order?

Before submitting a trail order, it is important to evaluate the market conditions in which the order will operate. Factors such as price volatility, liquidity, and the expected bid-ask spread can all influence how the trailing stop behaves and the quality of the eventual execution.

Since a trail order converts into a market order once triggered, the final execution price may differ from the trail stop level, especially in fast-moving or illiquid markets. Traders should also consider the trailing distance. If it is set too narrowly, the order may be triggered prematurely due to normal price fluctuations.

Can I cancel a trail order after it has been placed?

Yes, a trail order can be cancelled at any time before it is triggered. Once the trailing stop price is reached, the order is submitted as a market order. At that point, cancellation is generally no longer possible, as the order is sent directly to the market and may be executed immediately depending on market conditions.

How can I see the current stop price of my active trailing stop order?

The visibility of the current trail stop price depends on the trading platform being used. It reflects the dynamically adjusted stop level of your active trailing stop order.

LYNX+: Navigate to Portfolio, then select Open Orders.
The current trail stop price is shown above the trailing amount, displayed in grey and enclosed in brackets.
Trader Workstation (TWS): Go to the Pending (All) section.
The dynamically adjusted trail stop price is visible in the Stop Price column.
LYNX Trading App: Open the Orders tab.
The order overview displays key parameters, including the adjusted trail stop price.